Plaintiff, the Federal Trade Commission (Commission), by its undersigned
attorneys, alleges as follows:

1. The Commission brings this action under Section 13(b) of the Federal Trade
Commission Act (FTC Act), 15 U.S.C. § 53(b), to secure a permanent injunction
and other equitable relief, including rescission, restitution, and disgorgement, against
defendants for engaging in unfair and deceptive acts or practices in violation of Section
5(a) of the FTC Act, 15 U.S.C. § 45(a).

JURISDICTION AND VENUE

2. This Court has subject matter jurisdiction over this matter pursuant to 28 U.S.C.
§§ 1331, 1337(a), and 1345, and 15 U.S.C. §§ 45(a) and 53(b).

3. Venue in this district is proper under 28 U.S.C. § 1391(b) and (c), and 15 U.S.C.
§ 53(b).

THE PARTIES

4. The Commission is an independent agency of the United States government created by
the FTC Act, 15 U.S.C. §§ 41-58. The Commission enforces Section 5(a) the FTC Act, 15
U.S.C. §45(a), which prohibits unfair and deceptive acts or practices in commerce. The
Commission may initiate federal district court proceedings to enjoin violations of the FTC
Act and to secure such equitable relief as is appropriate in each case, including redress
for injured consumers. 15 U.S.C. § 53(b).

5. Defendant Michael Marcovsky is the President, Chairman of the Board and the Chief
Executive Officer of My Pet Television Network, and was until mid-1997, the President of
Olympic Entertainment Group, d/b/a Childrens Cable Network. Individually or in
concert with others, defendant Marcovsky directed, controlled, formulated, or participated
in the acts and practices complained of below. He resides, transacts or has transacted
business in this District.

6. Defendant Sheldon Altfeld is the President and Chief Executive Officer of defendant
Cable Marketing and Management, Inc., and Vice President of Network Operations for My Pet
TV. Individually or in concert with others, defendant Altfeld directed, controlled,
formulated, or participated in the acts and practices complained of below. He resides,
transacts or has transacted business in this District.

7. Defendant Cable Marketing & Management, Inc. (CMMI) is a corporation
with its principal place of business at 11500 West Olympic Boulevard, Suite 400, Los
Angeles, California. CMMI is a cable marketing and management company
allegedly hired by investors in Childrens Cable Network to manage their investment.
CMMI transacts or has transacted business in this District.

8. Defendant My Pet Television Network, Inc. (My Pet TV) is a Nevada
corporation with its principal places of business at 11500 West Olympic Boulevard, Suite
400, Los Angeles, California; 7115 Macapa Drive, Los Angeles, California; and 11288
Ventura Boulevard, Suite 811, Studio City, California. My Pet TV is a new television
network dedicated to providing pet and animal themed programming. My Pet TV has
received funds from investors as a consequence of the acts and practices complained of
below. My Pet TV transacts or has transacted business in this District.

9. Defendant The Pet Channel (TPC) is a Delaware corporation with its
principal places of business at 11500 West Olympic Boulevard, Suite 400, Los Angeles,
California and 7115 Macapa Drive, Los Angeles, California. TPC owns 80% of defendant My
Pet TV. TPC has received funds from investors as a consequence of the acts and practices
complained of below. TPC transacts or has transacted business in this District.

DEFENDANTS COURSE OF CONDUCT

10. Since at least 1996 and continuing thereafter, defendant Marcovsky and his agents
maintained a substantial course of trade in the offering and sale to consumers of
investments in cable television networks. Initially, defendant Marcovsky and his agents
sold, via telemarketing, an investment in general partnerships, or affiliates,
which were to own and operate a cable television network named Childrens Cable
Network (Childrens Cable), which was to broadcast non-violent,
educational childrens programs.

11. Childrens Cables agents sold interests in 33 separate general
partnerships, raising at least $16.5 million from investors. Of that $16.5 million,
Childrens Cable took a total of $3.3 million in license fees and their telemarketing
agents received $10.7 million. The remaining $2.5 million was allocated as working
capital for the general partnerships.

12. Each general partnership consisted of 50 members; each partnership unit cost
$10,000. According to the general partnership agreement, of the $500,000 raised through
the sale of partnership units, Childrens Cables telemarketing agents took
$325,000 for sales commissions and promotional fees and Childrens Cable retained an
additional $100,000 for television program licensing fees. The remaining $75,000 was
designated as working capital for the general partnerships. The investors who purchased
general partnership interests believed that all these funds were to be used for the
operations of their general partnership.

13. Pursuant to the general partnership agreement, each general partnership had
exclusive rights to a Childrens Cable territory. The general
partnerships were expected to purchase broadcast time on leased access cable
channels to show Childrens Cable programs. The general partnerships were obligated
to pay Childrens Cable for the rights to show these programs. The general
partnerships were to obtain revenue, and thus a return on their investment, solely through
the sale of advertising to be shown during the programs.

14. Pursuant to the general partnership agreement, the general partnerships selected
defendant CMMI to manage the day- to-day operations of the general partnerships. CMMI
received $70,000 of the working capital for each general partnership (a total of $2.3
million), with the remaining $5,000 staying with the individual general partnerships. As
the general partnerships manager, CMMI was supposed to arrange for airtime, sell
advertising, and perform routine administrative functions. Pursuant to the general
partnership agreement, all matters which were not ministerial functions were to be
submitted to the partners for a vote, including transferring an equity interest
owned by the partnership (majority vote required).

15. The general partnership agreement further stated that each partner had the right to
vote on all matters concerning the partnership. In addition, each general partnership was
to designate two investors, called Managing Partners who would act as a
liaison with the management company. In many cases, managing partners had no meaningful
role, if any, in managing their partnerships, and were not consulted on management
decisions as required by the general partnership agreement.

16. Starting in or about April 1997 and continuing throughout 1997, defendants Altfeld
and CMMI transferred working capital obtained from the general partnerships to defendant
Marcovsky and defendants My Pet TV and TPC to purchase 51% of My Pet TV for the general
partnerships. In total, at least $650,000 was transferred by defendants Altfeld and CMMI.

17. Starting in or about June 1997, defendants Altfeld and CMMI represented to the
general partners that all general partnerships, through their Managing Partners, agreed to
this transfer, and that the transfer would benefit each general partnership.

18. Starting in or about July 1997, defendants Altfeld and CMMI justified the transfer
of the working capital to My Pet TV as a way to salvage the money the investors had put
into Childrens Cable. In November 1997, defendants Altfeld and CMMI admitted that
(b)y the end of June (1997)it became apparent that the original concept was
seriously flawed and simply did not work because advertising was impossible to sell
for leased access channels.

19. In December 1997, defendant Marcovsky represented that four hours per week of My
Pet TV programs would be broadcast starting February 1998 on Oasis TV, a cable television
network.

20. In March and May 1998, defendant My Pet TV represented that it currently airs
select programming on Oasis TV.

21. Defendants course of trade is in or affecting commerce, within the meaning of
Section 4 of the FTC Act, 15 U.S.C. § 44.

DEFENDANTS VIOLATIONS OF THE FTC ACT

COUNT I

22. Defendants falsely represented, expressly or by implication, that all of the
general partnerships working capital would be used for Childrens Cable
Network. In fact, all of the general partnerships working capital was not used for
Childrens Cable Network. Indeed, defendants transferred at least $650,000 of the
general partnerships working capital to defendant My Pet TV.

23. Defendants falsely represented, expressly or by implication, that each general
partnership approved the transfer of its working capital for a 51% interest in My Pet TV.
In fact, each general partnership did not approve the transfer of its working capital for
a 51% interest in My Pet TV.

24. Defendants falsely represented, expressly or by implication, in December 1997 that
My Pet TV planned to broadcast its programming on Oasis TV in February 1998. In fact, in
December 1997, My Pet TV did not plan to broadcast its programming on Oasis TV in February
1998.

25. Defendants falsely represented, expressly or by implication, in March 1998 and
again in May 1998, that My Pet TV was broadcasting its programming on Oasis TV. In fact,
My Pet TV was not broadcasting its programming on Oasis TV in March 1998 or May 1998.
Further, My Pet TV never broadcast its programming on Oasis TV.

27. Defendants transferred at least $650,000 of the general partnerships working
capital to My Pet TV without the authorization or consent of the investors, in
contravention of the general partnership agreement.

28. This transfer caused substantial injury to the general partnerships that could not
have reasonably been avoided and is not outweighed by countervailing benefits to consumers
or to competition.

30. Defendants Marcovsky, Altfeld, CMMI, My Pet TV and TPC have operated a common
business enterprise while engaging in the unfair or deceptive acts and practices alleged
above and are therefore jointly and severally liable for said acts and practices.

CONSUMER INJURY

31. Defendants violations of Section 5(a) of the FTC Act have injured and will
continue to injure consumers. Because of defendants unfair and deceptive acts and
practices, consumers are likely to lose money and suffer substantial financial injury,
absent injunctive relief.

THIS COURTS POWER TO GRANT RELIEF

32. Section 13(b) of the FTC Act empowers this Court to issue injunctive and other
relief against violations of the FTC Act and, in the exercise of its equitable
jurisdiction, to award redress to remedy the injury to consumers, to order disgorgement of
monies resulting from defendants unlawful acts or practices, and to order other
ancillary equitable relief.

PRAYER FOR RELIEF

WHEREFORE, plaintiff requests that this Court:

(1) Award the Commission all temporary and preliminary injunctive and ancillary relief
that may be necessary to avert the likelihood of consumer injury during the pendency of
this action and to preserve the possibility of effective, final relief, including, but not
limited to, temporary and preliminary injunctions, appointment of a receiver, and an order
freezing each defendants assets;

(3) Award such relief as the Court finds necessary to redress injury to consumers
resulting from defendants' violations of Section 5(a) of the FTC Act, including, but not
limited to, the rescission of contracts or refund of money, and the disgorgement of
unlawfully obtained monies; and

(4) Award plaintiff the cost of bringing this action as well as such other and
additional equitable relief as the Court may determine to be just and proper.